Sections 75 and 81 of the Arbitration and Conciliation Act, 1996 read thus:
“75. Confidentiality.— Notwithstanding anything contained in any other law for the time being in force, the conciliator and the parties shall keep confidential all matters relating to the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement.
81. Admissibility of evidence in other proceedings.— The parties shall not rely on or introduce as evidence in arbitral or judicial proceedings, whether or not such proceedings relate to the dispute that is the subject of the conciliation proceedings,—
(a) views expressed or suggestions made by the other party in respect of a possible settlement of the dispute;
(b) admissions made by the other party in the course of the conciliation proceedings;
(c) proposals made by the conciliator;
(d) the fact that the other party had indicated his willingness to accept a proposal for settlement made by the conciliator.”
6. On a reading of Section 75, it is clear that the object of the section is sub-served by the expression “relating to” which is an expression of extremely wide import. (See: Renusagar Power Company Limited v. General Electric Company, (1984) 4 SCC 679 at 704). It is clear, therefore, that both the conciliator and the parties must keep as confidential all matters relating to conciliation proceedings.
7. The litmus test for determining whether the matter relates to conciliation proceedings was laid down by an earlier judgment of this Court. In Ruby General Insurance Co. Ltd. v. Pearey Lal Kumar, [1952] S.C.R. 501, the question to be decided was as to whether a dispute or difference arose out of a certain insurance policy. This Court laid down that the test for determining whether a dispute or difference arose out of the said policy is whether recourse to the contract, by which the parties are bound, is necessary for the purpose of determining the matter in dispute between them. If it is found that such recourse is necessary, then the matter would certainly fall within the policy. Following this judgment, and applying it to the facts of this case, it is clear that recourse needs to be had to conciliation proceedings as the genesis of this demarcation report is only in conciliation proceedings and not otherwise.
8. This being the case, it is of no matter that the present case does not fall within the four pigeon holes contained in Section 81, as otherwise, if there are insidious encroachments on confidentiality, a free and fair settlement may never be arrived at, thus stultifying the object sought to be achieved by Part III of the 1996 Act.
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
(Before R.F. Nariman and Sanjay Kishan Kaul, JJ.)
Govind Prasad Sharma & Ors. v. Doon Valley Officers Cooperative Housing Society Ltd.
Civil Appeal No. 10786 of 2017
(Arising out of S.L.P.(C) No. 9888 of 2015)
Decided on August 23, 2017
Citation:2017 SCC OnLine SC 1001,(2018) 11 SCC 501.
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